Search Gold Articles

Is The Everything Bubble About To Burst?

While the financial media “high fives” over stocks hitting new high, something far more important is brewing in the bond markets.

Bonds are the “smart money” in the financial system. The bond markets are not only much larger, but much more liquid than stocks. As such, when a major change begins to unfold, bonds usually “get it” much faster than stocks.

With that in mind, take a look at the UGLY Head and Shoulders pattern forming in the long-Treasury.

This is a serious topping pattern. And it suggests that bonds are about to reprice much lower.

What could cause such a drop?

INFLATION.

Inflation forces bond prices lower as yields have to rise to compensate for a loss of purchasing power (bond yields rise when bond prices fall). In light of this, that topping pattern in bonds is a major warning to the Bond Bubble (which we call The Everything Bubble) that the financial system is going to be in very serious trouble soon.

Globally the Bond Bubble is well north of $200 trillion. And when you include derivatives trade based on bond yields, it’s north of $550 TRILLION.

This is many multiples larger than the housing bubble or the tech bubble of the last 20 years. And because bonds are the bedrock of the financial system, when the Bond Bubble bursts, EVERYTHING will have to adjust accordingly.

Put simply, BIG INFLATION is THE BIG MONEY trend today. And smart investors will use it to generate literal fortunes.

We just published a Special Investment Report concerning FIVE secret investments you can use to make inflation pay you as it rips through the financial system in the months ahead

The report is titled Survive the Inflationary Storm and we are making just 100 copies available to the public.

Graham Summers is Chief Market Strategist for Phoenix Capital Research, an independent investment research firm based in the Washington DC-metro area with clients in 56 countries around the world.

Graham’s clients include over 20,000 retail investors as well as strategists at some of the largest financial institutions in the world (Morgan Stanley, Merrill Lynch, Royal Bank of Scotland, UBS, and Raymond James to name a few). His views on business and investing has been featured in RollingStone magazine, The New York Post, CNN Money, Crain’s New York Business, the National Review,Thomson Reuters, the Glenn Beck Show and more.